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Auditing

The SEC approves rules the Public Company Accounting
Oversight Board (PCAOB) proposed under the Sarbanes-Oxley Act of 2002
(
www.sec.gov/rules/pcaob/34-48180.htm ). They establish a
registration system for public accounting firms seeking PCAOB
permission to prepare or issue audit reports for publicly traded
companies. Under the act, firms that do not register with the board by
October 22 will not be permitted to render such audit services. (To
meet the October deadline, firms had to have submitted their
applications no later than the first week of September.)

The PCAOB begins notifying approximately 5,200 public
companies and 3,300 mutual funds of what it will charge them each year
in support of the board’s accounting oversight activities (
www.pcaobus.org/pcaob_news_8-04-03.asp ). Generally, what each
company must pay corresponds to its average monthly capitalization,
but those companies whose average monthly market capitalization does
not exceed $25 million or mutual funds with an average monthly net
asset value or market capitalization no greater than $250 million have
no fees due. About 62% of stock issuers will pay no more than $1,000
in such fees to the PCAOB each year, and the largest 1,000 issuers
will pay roughly 87% of the total due. The board also receives SEC
approval of its $68 million budget for 2003.